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Did the UK government underestimate the level of future unemployment?

There are concerns like that upwards of 500,000 employees from the UK public sector may well have been left out of unemployment forecasts by the Office for Budget Responsibility (OBR). The OBR has confirmed that up to 550,000 public sector employees were lifted from their calculations which indicated that one in 10 in the public sector would lose their jobs. This would indicate an additional 50,000 job losses, in addition to the hundreds of thousands already expected. So has the OBR been compromised?

There are serious questions as to whether the OBR is operating as a totally independent operation from the UK government or whether in fact there is some kind of political interference. If there has been some kind of political interference from the Treasury this may well explain the sudden departure of Sir Alan Budd whom the UK government had hoped would head up the OBR for the foreseeable future.

There is now a crisis of confidence within the OBR, and outside of the OBR, and George Osborne's honeymoon period within the Treasury appears to be coming to an end. Whether or not he can rescue the reputation of the OBR, and his own reputation, remains to be seen.

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